Qraft Technologies has launched the QRAFT AI-Pilot U.S. Large Cap Dynamic Beta and Income ETF (NYSE: AIDB).
Described by the firm as a first for the ETF space, “AIDB leverages Qraft’s proprietary AI-powered risk model making it the only, fully AI-powered risk managed ETF in the market”.
By accounting for over 70 macro and market data sets, assessing factors like momentum, volatility and correlation, AIDB will oscillate exposure between broad-based US Large Cap equities and cash/cash equivalents based on the AI’s perceived market risk on a weekly basis. By doing so, the fund seeks to provide downside mitigation against extreme losses and lower volatility of investors’ portfolios.
“We believe the application of AI in actively managed funds transcends the limitations of the human mind, allowing for potentially better risk management and investment decision making,” says Marcus Kim, founder and CEO of Qraft. “This is an especially relevant potential benefit for investors in times of market distress when emotions and biases are heightened. We’ve introduced AIDB to extend these benefits to investors seeking dynamic equity exposure amid global market volatility by anchoring this fund’s strategy to our time-tested AI risk prediction model.”
The firm writes that financial markets’ recent volatility–spurred by heightened inflation, geopolitical unrest, and other headwinds–have caused investors to seek risk-managed strategies. Unlike other risk-managed strategies which can be rules-based and often lag behind market moves, cap potential gains, or actively managed funds which are subject to human emotion and bias, AIDB seeks to account for market risk based purely on the factors that drive markets to potentially deliver a better vehicle for equity risk management and reduce the impact of drawdowns over the long term.
“Unlocking the power of AI to surpass the limitations of human investing has been our goal since 2016, and we’re so proud to deliver this new ETF at a time when we believe investors are seeking a new way to manage risk,” says Francis Geeseok Oh, APAC CEO of Qraft Technologies. “Qraft has been providing AI-powered dynamic beta risk management solutions to institutional investors in South Korea since 2019, with its proven reputation and record of helping investors navigate the market smoother by managing downside risk with AI model’s prediction power. AI’s speed and prediction capabilities will help investors uncover greater opportunities and we look forward to continuing to apply AI to help investors achieve their goals.”